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Startup Vic’s Impact Pitch Night

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Last month’s Startup Vic’s Pitch Night focused on Impact investing. Hosted by Startup Vic and the Giant Leap Fund (part of the Impact Investment Group), it was held at the Goods Shed with support from Stone & Chalk, Weploy, Pawa, Pak360, Waste Ninja and Marketing Entourage. The MC on the night was Mike Davis of the Humans of Purpose podcast, with an opening address by The Hon, Martin Pakula, Victorian Minister of Jobs, Innovation and Trade. The Minister made some announcements regarding the establishment of Angel Networks in Victoria.Given that Impact investment is demonstrating a propensity to generate better returns, this is a topic of growing interest alongside ethical investing, corporate social responsibility and the move towards ESG (Environmental, Social and Governance) reporting.

The Judging Panel was drawn from Work180, YourGrocer, Australian Impact Investments and Impact Investment Group.

Pitches in the order they presented (websites embedded in the names) were:

The Neighbourhood Effect

With the goal of making the transition to green living easier, this startup has been featured here before. It comprises an app-based solution and uses behavioural science to map a user’s carbon footprint. It also uses gamification to make recommendations linked to location and lifestyle preferences.

Generating revenue from referral fees and subscriptions, the team are targeting energy retailers and banking services among the first commercial partners, and have already attracted $100k via paid pilots and Crowdfunding. The judges sought clarity on what exactly the product “does”, and how localised the solutions can be.

Gecko Traxx

Unusually for these regular pitch nights, this is a tangible, manufactured product – a solution for portable and affordable off-road access for wheelchair users. It takes the form of an accessory attached to the existing wheels – expanding the surface area and increasing traction. With a James Dyson national design award, and as a member of the University of Melbourne Accelerator Prgram for 2019, the team already have15 re-sellers lined up. With a proposed retail price of $599 (and costing $95 to manufacture) the device is NDIS eligible, making it more accessible.

The judges were keen to understand the addressable market as opposed to the profile and size of the actual user base – for example, does the device appeal to users of both motorised and self-propelled wheelchairs? How does it fit in with other categories of assisted mobility products and devices? Had the team considered crowdfunding? What is the startup’s status as a NFP? What is the marketing plan?

Sempo

This startup offers a solution for inclusive payments and savings for the 1.7bn people in emerging markets who remain unbanked. Using Blockchain technology, Sempo claims to be backed by a global reserve token pegged to multiple local currencies – but it wasn’t clear which assets comprise the treasury ecosystem.

Part of the use case is to get cash to victims in crisis quickly without the associated NGO costs. With 4% transaction fees (as opposed to the typical 20% incurred by other soluitons) Sempo seeks to avoid regulatory controversy since it is not claiming to be an unofficial local currency.

Typical transaction costs comprise a 1-3% exchange fee, and a 0-1% transfer fee. Part of the solution is to grow local, in-market capacity, particularly for remittance services. With an AfterPay investor on board, the founders are seeking a $2m seed round. The initial focus is on the Pacific region, a major impediment are the compliance and regulatory costs – in meeting both the in-country and original jurisdiction obligations.

One use case is giving refugee access to bank accounts – when asked about KYC obligations, the founders responded that they can code KYC into the Blockchain without the need for “formal” KYC.

Bring Me Home

This startup makes surplus food accessible and affordable to everyone – utilising fresh food that is unsold in shops, cafes and restaurants. According to the founders, globally, one third of all food is wasted – if this represented a country, it would rank 3rd after the US and China in terms of carbon emissions.

Structured around a commission-based app, users become advocates. The market segments are B2C (consumers and SMEs) and B2B (food production, manufacturing and wholesale distribution). Seeking a $1m seed round, the founders are also running a crowdfunding campaign.

There are specific versions of the app for vendors to help them manage their inventory and schedule their daily listings in advance. Peak demand is between 2pm and 6pm, and after 8pm – underlining the need for vendors to get their offers uploaded in a timely fashion.

The app is starting to see some significant retention – of the 12,000 users, 75% are in Victoria, with half in Melbourne. 15% are deemed returning customers, of which 45% represent repeat business. Currently, the service is in 126 venues across Melbourne.

The judges asked how the business can ensure they are dealing with true surplus supply, and not just creating artificial demand. In response, the founders stressed that vendors need to map to their usual “full display”, rather then offering “made on demand” products.

The People’s Choice award went to Bring Me Home, while the Judges made Sempo the overall winner.

Next week: Musical Memories – Of Time and Place

Startup Vic’s Impact Pitch Night

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Due to my personal travel commitments in recent months, it’s been a while since I attended one of Startup Vic‘s regular pitch nights – so I was pleasantly surprised to see that these monthly events continue to draw a solid crowd. As with last year’s impact investing pitch night,  this event was co-sponsored by Giant Leap VC (part of the Impact Investing Group), with support from LaunchVic, who played hosts at the Victorian Innovation Hub.

As usual, the startups pitching appear in the order they presented:

Vollie

This is an on-line platform or market place for helping charities to find skilled volunteers for project-based assignments, mostly involving digital, marketing, technical, professional and advisory services that can be delivered remotely (rather than on-site or in-field).

The founders described the benefits to corporate clients in meeting their CSR goals. These companies either “sponsor” their employees’ time and/or donate money – to be honest, it was not entirely clear how this part worked. And of course, being a two-sided market place, Vollie also charges charities on a per project basis.

According to the presenters, there are 56,000 charities in Australia, and so far the platform has generated $360,000 in “value”.

However, Vollie only assists the charities with project on-boarding, whereas the NFPs themselves are responsible for actual project delivery.

While acknowledging the appeal to Gen Y/Z volunteers, the judges were interested to know how much personalisation the platform offers, and how QA/QC issues were handled. Having served on the board of a NFP myself, I appreciate how much more complicated it is to manage volunteers – from police checks to insurance, from training to risk management.

Cyber Clinic

Claiming to provide easier access (and a better user experience) to therapeutic clinic services, Cyber Clinic enables people to find a professional therapeutic counsellor or psychologist that matches their needs. Essentially an on-line directory for mental health care (part of the growing number of telehealth providers), the service matches clients and counsellors, connects them for sessions that can be delivered remotely and at times that suit the recipient, and measures the results.

Partly developed in response to the high incidents of mental health issues presenting to GPs, delivery of counselling services is via secure video conferencing and consultation, backed up by a dedicated app. The service is designed to run on even low-bandwidth connectivity, making it accessible to regional and country users.

The guiding principles are cost, access and trust (service providers are vetted before being admitted to the platform).

The judges were interested to understand the founder’s patient acquisition strategy, which involves connecting with government agencies, healthcare providers and corporates (e.g., as part of their EAP services) – so it’s clearly designed as a B2B model, plus a direct to market, public-facing website. The judges also wondered about customer retention when measured against outcomes.

STEMSparX

With the declining levels of STEM participation in high schools, STEMSparX is designed to engage younger students by bringing STEM education direct to their doorstep.

The service combines an AI-assisted on-line learning interface with practical DIY kits. Designed around the Arduino Open Source Ecosystem, the business model is based on a B2C subscription service. The founder is a participant in Melbourne University’s MAP programme, and has been running pilot project workshops and developing an engineering curriculum.

The judges wondered how STEMSparX would compete with the likes of Code Academy, and how effective a direct-to-consumer model is, unless it was combined with a channel strategy involving communication with parents, schools and public libraries? Plus, how does a service like this compete with other distractions such as online games, video streaming and social media?

Amber Electric

This alternative electricity seller is offering retail customers access to real-time wholesale prices. By only charging customers a $10 monthly service fee, Amber claims it can pass on the true wholesale price, based on 30-minute price resets (reflecting actual market supply and demand), rather than the fixed rates and price bands that traditional electricity retailers charge.

A key aspect of Amber’s business is the availability of renewable inputs (Australia has the largest % of renewables in the national grid – excluding WA which is not part of the grid…). For example, the increase of solar-generated energy from domestic sources (household rooftop panels) that can be fed into the grid can have an impact on the average unit cost of electricity from non-solar sources, and some resulting market distortion.

The judges were keen to know if Amber applies price loading to take account of passive consumption, and whether their revenue model allows for feedback funding into additional renewables? Another question was whether Amber customers will experience considerable price spikes during the summer spikes?

Currently, Amber is only available to people living in the Sydney metropolitan area, and who do NOT have solar panels (due to the issues of feed-in tariffs?). So, very limited access at present – but clearly a disruptive model that threatens to undermine the highly regulated retail market.

It’s fair to say that Amber ticked the box for most people in the audience, as it won both the Judges’ prize, and the people’s choice.

Next week: Startup Vic’s FinTech Pitch Night

Making an Impact at Startup Victoria’s Pitch Night

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A relatively new term that was coined around the time of the GFC, “impact investing” can be seen in the same light as CSR, TBL, ethical investing and conscious capitalism, whereby businesses combine purpose with profit, underpinned by strong and open corporate governance, with the specific goal of delivering social and environmental outcomes. Not to be confused, of course, with NFPs or social enterprises.

The latest pitch night hosted by Startup Victoria, with support from impact VC investor Giant Leap Fund, presented four startups that all aspire to bring about some form of social impact, in areas such as: transport for women; gender diversity in the workplace; mental health; and training for disability support workers. (Surprisingly, there were no pitches from startups with a direct environmental impact.)

In order of appearance, the startups were (as usual, links are in the titles):

Diverse City Careers

Offering a new approach to recruitment, DCC only work with employers who meet their standards on workplace policies for women. Currently seeking $1m in investment, they claim that 50% of their candidates get shortlisted, and 25% get hired, and already have 80 accredited employers on their books.

Using an endorsement model for accredited employers, as well as standard recruitment services, DCC is able to generate both annuity and transaction revenue. By ranking employers and holding them accountable for their own policies, is able to promote best practice and establish industry benchmarks. DCC is now moving into industry and media partnerships, and plans to build a dashboard for analytics.

The panel of judges were keen to understand how DCC will maintain its point of differentiation, as well as build on its definition of diversity (e.g., transgender, transsexual and intersex). And given that there are federal initiatives already in this space, does an accreditation from DCC have as much value or impact?

Enabler

According to data provided by the presenters, around 1.9m disabled people in Australia need support workers. With the introduction of the NDIS, the number of trained helpers needs to grow from 300k to 600k, and there are currently 3,500 disability service providers to help train, recruit and employ these support workers. A key challenge is the quality of available education, with providers only spending $1,265 per worker per annum on training and development.

Enabler is seeking a $250k seed investment to launch a new product, comprising core content and training modules distributed online and delivered via mobile devices. With a focus on personalised content, Enabler is already in talks with 11 service providers and engaging with existing paying customers (who represent as few as 70 to around 1400 end users).

The key challenge I found with this pitch was the lack of explanation on why current training content and materials are proving to be so inadequate (even allowing for differences in individual learning styles). For example, what makes Enabler’s service so much better, and how will it achieve sustainable personalization in a product that needs to be both scalable and economically viable?

Shebah

This is a ride share service for women drivers and passengers (and their kids and pets), that grew out of economic and social necessity. It started life as a project on Go Fund Me, has since pivoted to Shebah, launched a mobile app, and is now available in Melbourne, Geelong, Brisbane, Gold Coast, Sydney and Sunshine Coast (with Perth, Darwin and Adelaide to follow).

Adoption among the disability community has been a notable side effect (e.g., enabling customers to get to medical appointments), and each driver gets a free consultation with a CPA about setting up an ABN etc.

Experiencing 40% growth in volume (and 100 new accredited drivers per week), the founder is asking for $500k funding to hire an in-house engineer/developer to build additional app functionality (such as pre-booking), scaling the business and growing to a minimum 1,000 rides per day. The app can already take multiple currencies, and there has been interest from Mexico, South Africa and Brazil.

With the various issues facing Uber and the gig-economy itself, the judges were naturally keen to understand how Shebah regards its own drivers (i.e., employees or freelances). For registration, tax and accounting purposes, Shebah drivers are treated as independent contract workers (sole traders), with no required minimum hours. (The founder mentioned potential plans to offer drivers share options in the business, which could prove an interesting business model.)

Despite some reasonably high-profile media coverage, Shebah has not undertaken any advertising campaigns, relying instead on general publicity and friendly ambassadors.

Asked about customer experience measures, the founder mentioned average waiting time, and driver retention as key indicators (apparently, the only 4% of Uber drivers last more than 12 months). Shebah also acknowledged that their fares are cheaper than taxis (but more expensive than Uber) with an average fare of $25, representing a margin of less than 10%

Limbr

With a tag line of “a place to be real”, Limbr is an app-based platform that is designed to take some of the stigma out of mental illness, and provide easier access to mental health services.

Despite the staggering mental health statistics, two-thirds of sufferers never seek treatment. To break down some of the barriers and overcome access issues, Limbr offers a three-tier service: a free “social network”, a personal dashboard tool, and online support from qualified mental health professionals (“listeners, coaches, therapists”). The revenue model is a combination of subscription fees and commission from provider sales, plus evidence-based public funding.

The founders recognize it’s a highly fragmented market, so therapists are interested in the referral aspect of this new channel to market. (One challenge is that the current $10 bulk bill rebate to see a therapist is not available for e-health providers.)

The app plans to use popularity to drive traction, and while the message that it’s “OK to share” is designed to be positive and encourage a healthier approach to mental illness, there was some concern that in some ways, the internet has normalised the issue. The presentation mentioned that there are 20m posts about depression on Instagram. So, isn’t social media, along with increased isolation and anti-social online behaviour part of the problem?

Asked by the judges about privacy, authentication and trust, Limbr plans to go to market via therapist advocates, and will focus on moderation and data analytics.

Based on the night’s presentation, the judges awarded Shebah first prize, and it certainly was the most engaging and rounded pitch of the four.

Next week: More on Purpose